Calgary, Alberta, Canada, July 25, 2012 — TransAlta and Puget Sound Energy entered into a power purchase agreement for coal transition power from the Centralia generating station.
If approved by Washington utility regulators, the contract will benefit PSE customers by providing them another source of low-cost power, while advancing a separate TransAlta agreement with state government and the environmental community to phase out coal-fired power generation in Washington by 2025.
PSE selected the TransAlta offer through a competitive request for proposal process, evaluating the Centralia resource against more than 30 competing power supply alternatives.
The state Legislature in 2011 passed a bill codifying a collaborative agreement between TransAlta, lawmakers, environmentalists, and labor representatives. The timelines agreed to by the parties enable the state to make the transition to cleaner fuels, while preserving the family-wage jobs and economic benefits associated with the low-cost, reliable power provided by the Centralia plant.
The legislation allows long-term contracts, through 2025, for sales of coal transition power associated with the 1,340-MW Centralia facility, Washington's only coal-fired plant.
Under its power purchase agreement with TransAlta, PSE will buy 180 MW of firm, base-load coal transition power from TransAlta starting in December 2014. In the following 12 months the contract increases to 280 MW. From December 2016 to December 2024 the contract is for 380 MW, and in the last year the contract volume drops to 300 MW.
PSE expects to need additional power supplies for its customers beyond what the TransAlta contract provides. The utility continues to review other short-listed bids from its latest RFP process, and anticipates issuing another RFP in 2013.
The power purchase agreement is supported by environmental groups.
The proposed TransAlta-PSE power transaction now awaits review by the Washington Utilities and Transportation Commission.